International Human Resource Management Cultural Values Management Essay

Abstract

This study aimed to investigate the work and personal related issues experienced by expatriate managers while they were working with local subordinates in Thailand. It provides profound information for expatriates who wish to work and live in Thailand. It also guides expatriates on how to work effectively within the Thai cultural environment. One hundred and forty one expatriate managers, who were working in Thailand at the time of the study, were asked to respond on fifteen work and personal-related factors, namely Culture, Communication, Interaction with subordinates, Supervision, Empowerment, Work permit, Opportunity to acquire skills, Career advancement, Adaptation of living styles, Performance appraisals, Work autonomy, Career satisfaction, Stress, Negotiation styles and Health condition. Major results revealed that cultural differences, communication styles, relationships with subordinates, supervisory difficulties and inability to empower were the top five obstacles that encountered by the expatriates. Research implications and recommendations are also discussed.

Keywords: Expatriation, Thailand, International Human Resource Management, Cultural Values

Introduction

Globalization is one of the major trends in the business environment, with companies increasingly looking to enter global markets. This creates a need for companies to manage international operations effectively. One option is to send an employee to the foreign location to live and work, with this manager known as an expatriate manager. This process has significant advantages and disadvantages. This requires being aware of potential problems, selecting the right employee to take on the role of expatriate and preparing the expatriate and their family for the experience.

One of the greatest challenges for expatriates is the cultural complexity of the environments in which they operate. They are confronted with new systems of values, beliefs and ‘ways of doing things’ that may be dramatically different to those of their home country. Such variation complicates the international business environment and expatriates are at the forefront of management this complexity. Consequently, the development of expatriate cross-cultural capabilities is essential for international business success.

Many expatriates experience ‘culture shock’. They are unable to interpret cues from a new and uncertain environment. They are faced with the seemingly inexplicable behavior of those around them, which is governed by a culture that they do not understand. Their lack of comprehensive mental models for understanding the local culture inhibits their awareness of what is appropriate or inappropriate behavior. Expatriates discover that their past behaviors do not work in the new culture, but they have not yet learned more appropriate substitute behaviors (Lau, Nicholas, O’Flynn, Ricciotti and Sammartino, 2001).

As Dinther and Nije (2000) quoted that the world has become a global village, in which the international expansion of companies continues at a fierce pace. A company’s success depends to a large extent on the quality of its staff, and even more so in the international marketplace. Any type of problem, in the final analysis, is either created or must be solved by people. Therefore, having the right people in the right place at the right time emerges as one of the keys to a company’s international success.

For an international assignment to be successful, it is crucial to have the right recruitment and selection tools in place, as well as the instruments to make an assignee motivated to take on the international assignment. All Human Resources Management issues acquire an extra international dimension when a company internationalizes: human resources planning, recruitment and selection, terms and conditions for an assignment, communication issues, career management and repatriation issues all need to cross national and cultural borders.

This study has examined the problems that expatriate managers in Thailand have encountered and the possible solutions to the problems for better prepare the success of expatriate assignments. It provides profound information for expatriates who are working in Thailand in term of how to prepare themselves to avoid the obstacles and how to lead Thai subordinates effectively and appropriately. More specifically, it aimed to a) identify the major obstacles that are facing expatriate managers in Thailand; b) find out the possible solutions for the existing problem and c) provide recommendations for the expatriate managers.

It is expected that the current study will provide information and recommendations for expatriates who are working or intend to work in Thailand in term of how to manage themselves with Thai subordinates effectively and appropriately. The more they learn and understand Thai context, the better they prevent the failure for their career. In addition, not only expatriates who gain the benefit but also the Thai subordinates as well because they can realize how to work with expatriate managers and change or adapt their behavior.

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Literature Review

Expatriates: An Overview

An expatriate is an employee working in a unit or plant who is not a citizen of the country in which the unit or plant is located but is a citizen of the country in which the organization is headquartered. Mathis and Jackson (2000) suggested four types of expatriates based on their job assignment since not all individuals decide to work as expatriates are similar in the assignments undertaken. Volunteer expatriates want to work abroad for a period of time because of career or self-development interests. Often, these expatriates volunteer for short-term assignments of less than a year so that they can experience other cultures and travel to desired parts of the world. Traditional expatriates are professionals and managers assigned to work in foreign operations for one to three years. They then rotate back to the parent corporation in the home country. Career development expatriates are placed in foreign jobs to develop the international management capabilities of the firm. They may serve one to these “tours” in different countries, so that they can develop a broader understanding of international operations. Global expatriates comprise of those who move from one country to another. Often, they prefer to work internationally rather than in the home country.

In the IHRM literature, it is advocated by a number of writers, including Chowanec and Newstrom (1991) and Oddou (1991) that consideration of four key aspects contribute to the success of international assignments. These aspects are selection, preparation, management (active support) and repatriation. In the area of selection, Sullivan and Tu (1993:25) indicate that the three major factors to be considered when choosing an individual for an overseas assignment are technical and decision-making skills, personal characteristics and the family situation. However, Tung (1984:141) reports that US personnel administrators base the selection decision primarily on technical competence, with insufficient emphasis on the potential expatriate’s relational skills and family situation.

To prepare for relocation, Shilling (1993:63) indicates that organizations should have clear relocation policies, pre-departure orientation and on-site cultural adaptation training. A number of researchers, including Enderwick and Hodgson (1993:417), have highlighted deficiencies in the preparatory activities undertaken by organizations for their expatriate personnel and families prior to departure. Indeed, Davidson and Kinzel (1995:109) observe that family-oriented support does not appear to be a priority for many companies. They also report that assisting expatriates’ spouses to gain employment or offering employment within the company seems to be of little concern to the companies sampled.

Selection of Expatriates

According to McFarlin and Sweeney (1998), had examined the ways the multinational corporations evaluate candidates for foreign assignments. Basically, interviews (including the spouse in many cases), standardized tests (measuring things like adaptability and emotional maturity), and an assessment of past performance are some of the key screening mechanisms used to select expatriates (Phatak, 1995). Interviews are almost always used by U.S. multinational corporations in the selection process. Beyond the obvious job-specific qualifications, the purpose of these interviews should be look for the presence of factors that tend to predict expatriates success. Some selection factors are suggested by Adler (1997) include a willingness to communicate, good cross-cultural communication and language skills, flexibility and open-mindedness about other cultures, the ability to cope with the stress of new situations, the spouse’s career situation and personal attributes (he or she must also be open, flexible, able to handle stress, etc.), the existence of quality educational facilities for the candidate’s children in the overseas location (70% of expatriates take their children with them), and enthusiasm for the foreign assignment and a good track record in previous foreign and domestic moves.

McFarlin and Sweeney (1998) claimed that to see the picture of expatriate selection, consider the overall selection process that experts recommend. First, the multinational corporations should put together a three person selection team consisting of a home country manager, a host country manager, and a human resource professional. The role of the human resource professional would be to identify potential candidates and make sure that a variety of selection tools are used. The home and host country managers are there to make sure that the needs of both the parent company ad foreign subsidiary are met. The second and third steps involve deciding what the real purpose of the overseas assignment should be and assessing just how important cross-cultural skills will be in assignment.

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Once the first three steps are complete, then the selection team can create a set of criteria for success in the position. This will allow the team to identify potential candidates (through referrals, job postings, and other mechanisms). Candidates can then be screened using a variety of tools (such as interviews, exercises, tests, and so on). Once the pool has been narrowed to a few candidates, more in-depth interviews can take place that lay out the assignment in detail. These interviews would include information about what expatriate can expect to find in the host country and the ramifications of the assignment for his or her career on return. Especially important at this stage is to conduct interviews with the spouse. This gives the spouse a better feel of what life overseas will be like. Any concerns the spouse might have about the foreign assignment can also be discussed. Careful attention to these steps allow the selection team to offer the position to the candidate with the best chances of success and, once it is accepted, to start actual preparations for the foreign assignment.

Training, Preparation, and Adjustment of Expatriates

According to Phatak (1995), what constitutes “effective preparation” for an overseas assignment is a complex issue. Nevertheless, all training programs should have two basic goals: a) help employees be effective in their overseas jobs as quickly as possible; and b) minimize any adjustment problems the employee and his or her family may have in their new environment.

Many experts believe that there are three important goals that must be met if expatriates are actually learn from the training they receive. The first goal involves getting expatriates to pay attention to cultural differences that explain why foreigners think and behave the way they do. Next, expatriates must retain knowledge about behavior that is culturally appropriate. In essence, expatriates must be able to think about the knowledge they have been exposed to and be able to use it to develop a mental framework for their own behavior. The last goal involves convincing expatriates to practice culturally appropriate behavior that is consistent with the “guidelines” developed in their mental frameworks. This process helps expatriates refine their efforts at culturally appropriate behavior and boosts their self-confidence in dealing with foreign colleagues, clients, and suppliers (Black and Mendenhell, 1990). Training can range from fairly superficial activities that can be covered in a few days to very rigorous efforts requiring substantial amounts of time and effort. In fact, some intensive training efforts may take months to complete (McFarlin and Sweeney, 1998).

Cross-cultural training

Luthan and Farner (2002) stated that one of the main reasons for effective cultural training is to help the failure rate of expatriate managers. Defined as the premature return by an expatriate from an overseas assignment, failure rate are between 25 and 40 percent when the expatriate is assigned to a developed country and a whopping 70 percent when the expatriate is assigned to a still-developing country (Shay and Tracey, 1997). An overwhelming majority of these failures is attributed to the expatriate’s and/or spouse’s inability to adapt to the new culture (Thomas, 1998; Tung, 1988).

The importance of developing expatriate managers for their overseas assignment through the utilization of cross-cultural training seems apparent. Considerable research supports that cultural training can have a positive effect on cultural adjustment and expatriate performance (Frazee, 1999; Deshpande and Viswesvaran, 1992). Caudron (1991) highlights some specific dimensions which cultural training can help in reducing costly expatriate failure and increase the effectiveness of their assignment: Negotiation styles: expatriates should be made aware that negotiation styles vary widely from country to country. For example, in Russia negotiations are conflict oriented. However, in Asian cultures, more of a consensus-oriented negotiating style is more appropriate. Communication: in the USA, business associates have a tendency to address each other by first names right after being introduced. However, in France it may take three to six months before business associates feel comfortable addressing each other without a formal title. Non-verbal cues can also be barriers to effective communication. For example, standing too far from a Middle Easterner or standing too close to a Spaniard can be interpreted by both as a lack of interest. Social relations: Americans tend to place a high value on informality as a way of increasing a comfortable environment. Conversely, Europeans tend to be more formal, both in dress and demeanor, while conducting business or entertaining guests. As a result, Europeans may interpret the informal environment as a sign of disrespect. On the other hand, Americans may interpret European formality as stiff and unfriendly. Family lifestyle adjustment: concerns associated with everyday lifestyle adjustment in another country, such as where to stop, how to get the kids to school, and how to decode the public transportation system can be quite stressful for expatriates and their families.

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Thais and Expatriates: Strengths and Weaknesses

Based on a study by Nipatpattanasai (2001) on Thai and expatriates relationship, it offers useful insights into the nuances of intercultural workplace communication in Thailand. From Thais’ perspective, expatriate managers seemed to be strength in the areas of willingness to understand Thai culture, openness to talk about differences in opinion, willingness to accommodate differences, work very hard, are focused on the job at hand, and strive to understand its intricate details, polite and reasonable with subordinates as well as with clients, professionalism, straightforwardness, and results-oriented. However, the expatriates needed to improve in some areas such as being bossy, underestimate the ability of local staff, misinterpretation of Thai ways, and lack of trust.

On the other hand, expatriates identified loyalty, friendly, patient, co-operative, sensitive, respect for authority as the strengths of Thai staff. Weaknesses of Thais were also seen by the expatriates such as lack of time management, failure to separate personal and professional life, low acceptance of change, and lack of foresight. Table 1 presents the culture gaps between Thais and expatriates.

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Table 1 about here

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Research Method

Research Variables:

Fifteen factors have been identified to determine the issues from expatriates. The factors were divided into two categories which are: a) work-related factor and b) personal factor. They have been selected on the basis of the expatriate key traits and competencies and also on their career challenges and opportunities. The first category is “Work-related factors” which consisted of Communication, Work & National Culture, Career Advancement, Stress Handle Competence, Appraisals, Restrictions on work permits, Supervision, Interaction with Subordinates, Career Satisfaction, The opportunity to acquire new management and business skill, Negotiation Styles, Work Autonomy, and Empowerment. The second category is “Personal factors” included Adaptation of Living Styles and Health Condition

Conclusion and limitation

The current study intended to identify the major problems/obstacles associate with expatriate managers living and working in Thailand. The fifteen expatriate issues were identified to determine the issues from the expatriate perspectives. Expatriate issue factors: fifteen expatriate issue factors have been identified to determine the issues from expatriate and also to determine the possible solutions to the issues. The factor was divided into two categories which are work-related obstacles and personal obstacles. They have been selected on the basis of the expatriate key trait and competencies and also on their career challenges and opportunities. 300 sets of questionnaire were distributed to the foreign based firms. The total percent of respondents was 47%.

In additions, based on the research results, there were always differences in cultural context and perspectives that can lead to be an obstacle for expatriate managers who are working in Thailand. In this study, there were five most occur obstacles. There were work and national culture, communication, interaction with subordinates, supervision and empowerment. People from different countries have their own styles that may differ slightly or greatly from the others. To cope with the issues, the company should have the effective selection, training and preparation methods. Apart from the expatriate management methods, it was both expatriate managers and Thais responsibility to understand each other perspective and cultural context, to have better collaboration in working conditions.

In addition, as the global business have no longer boundaries across countries. Managers from different countries would require more working together with the host country staffs to deliver the result of collaboration and management. This research and the future research on similar topic would become more important in term of global business as it becomes a source of cross-cultural management and preparation of successes.


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